CITY OF SAN ANTONIO, TEXAS Comprehensive Annual Financial Report & Other Reports Year-Ended September 30, 2015

Incorporated December 14, 1837 Charter Adopted October 2, 1951

Council Manager Form of Government

Prepared by: DEPARTMENT OF FINANCE

Ben Gorzell Jr., CPA Chief Financial Officer

Troy Elliott, CPA Finance Director

Melanie Seale, CPA Assistant Director

Victoria Roeder Controller

Elizabeth Drouillard, CPA Financial Reporting Manager

Jay Blackwell General Ledger Manager

Financial Reporting Cassie Arebalos Jacqueline Bennett, CPA Nathalie Bullock Daisy Castillo Augustine Fannah Joseph Kobilka, CPA Mary Lara Theresa Littlefield Kimberly Nunez Mark Ramirez Patrice Wallace

General Ledger Carlos Beechner Denise Fuller Gerry Gavia Haley Smith Joe Vasquez

With Assistance From:

Financial Services Margaret Villegas, Assistant Director Cappi Arriola, Financial Management Administrator Tina Murillo, Tax Assessor Administrator Alejandro Tijerina, Financial Manager Mike Martinez, Collections Manager

Accounting Services Marilyn Canales, Billing & Accounts Receivable Manager Veronica Carrillo, Fiscal Operations Administrator Kay Grant, Accounts Payable Manager Joni James, Payroll Administrator Juanita Mack, CPA, Disbursement & Receivable Administrator Department Fiscal Administrators

Public Utilities Jeff Pullin, Public Utilities Administrator

Member of the Government Finance Officers Association of the United States and Canada

INTRODUCTORY SECTION

CITYOFSANANTONIO,TEXAS

ComprehensiveAnnualFinancialReport&OtherReportsTableofContentsYearEndedSeptember30,2015TITLEPAGEINTRODUCTORYSECTION TableofContents LetterofTransmittal________________________________________________________________________ixii CertificateofAchievementforExcellenceinFinancialReporting_____________________________________ xiii CityofSanAntonioMayorandCityCouncil _____________________________________________________ xiv OrganizationalChart________________________________________________________________________ xv FINANCIALSECTION IndependentAuditorsReport ManagementsDiscussionandAnalysis(RequiredSupplementaryInformation)(Unaudited)____________ 1 BasicFinancialStatements: GovernmentwideFinancialStatements: StatementofNetPosition ______________________________________________________________ 12 StatementofActivities_________________________________________________________________ 13 FundFinancialStatements: GovernmentalFundsFinancialStatements: BalanceSheet______________________________________________________________________ 14 ReconciliationoftheBalanceSheettotheStatementofNetPositionGovernmentalFunds_______ 15 StatementofRevenues,Expenditures,andChangesinFundBalances_________________________ 16 ReconciliationoftheStatementofRevenues,Expenditures,andChangesinFundBalances ofGovernmentalFundstotheStatementofActivities____________________________________ 17 ProprietaryFundsFinancialStatements: StatementofNetPosition ____________________________________________________________ 18 StatementofRevenues,Expenses,andChangesinNetPosition______________________________ 19 StatementofCashFlows _____________________________________________________________ 20 FiduciaryFundsFinancialStatements: StatementofFiduciaryNetPosition/BalanceSheet________________________________________ 21 StatementofChangesinFiduciaryNetPosition___________________________________________ 22 DiscretelyPresentedComponentUnitsFinancialStatements: StatementofNetPosition ____________________________________________________________ 23 StatementofActivities_______________________________________________________________ 24 NotestoFinancialStatements_____________________________________________________________ 25

CITYOFSANANTONIO,TEXAS

ComprehensiveAnnualFinancialReport&OtherReportsTableofContentsYearEndedSeptember30,2015 RequiredSupplementaryInformationOtherThanMD&A(Unaudited): BudgetaryComparisonSchedule: GeneralFund_________________________________________________________________________ 201 PreK4SA___________________________________________________________________________ 202 PensionandPostemploymentSchedules: SchedulesofFundingProgress___________________________________________________________ 203 SchedulesofChangesintheNetPensionLiabilityandRelatedRatios____________________________ 206 SchedulesofContributions______________________________________________________________ 210 CombiningFinancialStatementsandSchedules: NonmajorGovernmentalFunds: CombiningBalanceSheet_______________________________________________________________ 214 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances__________________ 215 SpecialRevenueFunds: CombiningBalanceSheetSpecialRevenue________________________________________________ 216 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances SpecialRevenue ____________________________________________________________________ 217 CombiningBalanceSheetGrants _______________________________________________________ 218 CombiningStatementofRevenues,Expenditures,andChangesinFundBalancesGrants___________ 219 CombiningBalanceSheetOtherSpecialRevenues__________________________________________ 220 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances OtherSpecialRevenues ______________________________________________________________ 221 CombiningBalanceSheetBlendedComponentUnits _______________________________________ 222 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances BlendedComponentUnits____________________________________________________________ 223 CapitalProjectsFunds: CombiningBalanceSheetCapitalProjects________________________________________________ 224 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances CapitalProjects_____________________________________________________________________ 225 CombiningBalanceSheetGeneralObligationBonds________________________________________ 226 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances GeneralObligationBonds_____________________________________________________________ 227 CombiningBalanceSheetCertificatesofObligationBonds___________________________________ 228 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances CertificatesofObligationBonds________________________________________________________ 229 CombiningBalanceSheetOtherCapitalProjects___________________________________________ 230 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances OtherCapitalProjects________________________________________________________________ 231

CITYOFSANANTONIO,TEXAS

ComprehensiveAnnualFinancialReport&OtherReportsTableofContentsYearEndedSeptember30,2015 CombiningFinancialStatementsandSchedules(Continued): PermanentFunds: CombiningBalanceSheetPermanent____________________________________________________ 232 CombiningStatementofRevenues,Expenditures,andChangesinFundBalances Permanent ________________________________________________________________________ 233 SupplementaryBudgetandActualSchedulesforLegallyAdoptedFunds: GeneralFund________________________________________________________________________ 234 DebtServiceFund_____________________________________________________________________ 241 SpecialRevenueFunds_________________________________________________________________ 242 PermanentFundCityCemeteries_______________________________________________________ 258 NonmajorEnterpriseFunds: CombiningStatementofNetPosition_____________________________________________________ 259 CombiningStatementofRevenues,Expenses,andChangesinNetPosition_______________________ 260 CombiningStatementofCashFlows______________________________________________________ 261 InternalServiceFunds: CombiningStatementofNetPosition_____________________________________________________ 262 CombiningStatementofRevenues,Expenses,andChangesinNetPosition_______________________ 263 CombiningStatementofCashFlows______________________________________________________ 264 FiduciaryFunds: FireandPolicePensionandHealthCareFunds: CombiningStatementofFiduciaryNetPosition ___________________________________________ 265 CombiningStatementofChangesinFiduciaryNetPosition__________________________________ 266 AgencyFunds: CombiningBalanceSheet_____________________________________________________________ 267 CombiningStatementofChangesinAssetsandLiabilities___________________________________ 268 NonmajorDiscretelyPresentedComponentUnits: CombiningStatementofNetPosition_____________________________________________________ 271 CombiningStatementofActivities________________________________________________________ 272 CapitalAssetsUsedintheOperationofGovernmentalFunds: ScheduleofCapitalAssetsbySource______________________________________________________ 273 ScheduleofCapitalAssetsbyFunctionandActivity__________________________________________ 274 ScheduleofChangesinCapitalAssetsbyFunctionandActivity_________________________________ 275

CITYOFSANANTONIO,TEXAS

ComprehensiveAnnualFinancialReport&OtherReportsTableofContentsYearEndedSeptember30,2015 STATISTICALSECTION(UNAUDITED) FinancialTrends: NetPositionbyComponent,LastTenFiscalYears ____________________________________________276 ChangesinNetPosition,LastTenFiscalYears _______________________________________________277 FundBalances,GovernmentalFunds,LastTenFiscalYears_____________________________________278 ChangesinFundBalances,GovernmentalFunds,LastTenFiscalYears____________________________279 TaxRevenuesbySource,GovernmentalFunds,LastTenFiscalYears_____________________________280 RevenueCapacity: AssessedValueandActualValueofTaxableProperty,LastTenFiscalYears________________________281 DirectandOverlappingPropertyTaxRates,LastTenFiscalYears________________________________282 PrincipalPropertyTaxpayers,CurrentYearandNineYearsAgo _________________________________283 PropertyTaxLeviesandCollections,LastTenFiscalYears______________________________________284 TaxableSalesbyCategory,LastTenCalendarYears___________________________________________285 DirectandOverlappingSalesandUseTaxRates,LastTenFiscalYears____________________________286 DebtCapacity: RatiosofOutstandingDebtbyType,LastTenFiscalYears______________________________________287 RatiosofNetGeneralBondedDebtOutstanding,LastTenFiscalYears____________________________288 DirectandOverlappingGovernmentalActivitiesDebtasofSeptember30,2015____________________289 LegalDebtMarginInformation,LastTenFiscalYears__________________________________________290 PledgedRevenueCoverage,LastTenFiscalYears ____________________________________________291 DemographicandEconomicInformation: DemographicandEconomicStatistics,LastTenCalendarYears _________________________________293 PrincipalEmployers,CurrentYearandNineYearsAgo_________________________________________294 OperatingInformation: FullTimeEquivalentCityGovernmentEmployeesbyFunction/Program,LastTenFiscalYears_________295 OperatingIndicatorsbyFunction/Program,LastTenFiscalYears________________________________296 CapitalAssetStatisticsbyFunction/Program,LastTenFiscalYears_______________________________297

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ComprehensiveAnnualFinancialReport&OtherReportsTableofContentsYearEndedSeptember30,2015FEDERALSECTION SummaryScheduleofFederalAwardsbyType,LastTwoFiscalYears_________________________________298 ScheduleofExpendituresofFederalAwards ByGrantor,FederalProgramandGrantNumber_______________________________________________299 NotestotheScheduleofExpendituresofFederalAwards__________________________________________304 IndependentAuditorsReportonInternalControlOverFinancialReportingandonComplianceandOther

MattersBasedonanAuditofFinancialStatementsPerformedinAccordancewithGovernmentAuditingStandards_____________________________________________________________________________306

IndependentAuditorsReportonComplianceForEachMajorFederalProgramandReportonInternalControlOverComplianceasRequiredbyOMBCircularA133____________________________________308

ScheduleofFindingsandQuestionedCosts _____________________________________________________310 CorrectiveActionPlan ______________________________________________________________________312 SummaryStatusofPriorYearFindings _________________________________________________________313STATESECTION SummaryScheduleofStateAwardsbyType,LastTwoFiscalYears___________________________________317 ScheduleofExpendituresofStateAwards ByGrantor,StateProgramandGrantNumber_________________________________________________318 NotestotheScheduleofExpendituresofStateAwards____________________________________________319 IndependentAuditorsReportonInternalControlOverFinancialReportingandonComplianceandOther

MattersBasedonanAuditofFinancialStatementsPerformedinAccordancewithGovernmentAuditingStandards_____________________________________________________________________________320

IndependentAuditorsReportonComplianceForEachMajorStateProgramandReportonInternalControlOverComplianceasRequiredbytheStateofTexasSingleAuditCircular___________________________322

ScheduleofFindingsandQuestionedCosts _____________________________________________________324 CorrectiveActionPlan ______________________________________________________________________326 SummaryStatusofPriorYearFindings _________________________________________________________327

Letter of Transmittal

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CITYPROFILE(continued)TheCityislocatedinSouthCentralTexas,approximately75milessouthofthestatecapitalofAustin,andservesasthecountyseatforBexarCounty.SanAntoniansenjoyfirstratemedicalservices,aconvenientandefficientairport,anexcellenthighwaysystem,mildweather,andsuperbrecreationchoices,including:championshipgolfcourses,47milesof lineargreenwaytrails,themeparks,historicalattractions,museums,professionalsportingattractions,andalivelyperformingartsenvironment.AsofSeptember30,2015,theCitysgeographicareawasapproximately467squaremiles.TheUnitedStatesCensusBureaucitestheCityasthesecondmostpopulatedcityintheStateofTexaswith1,436,697citizensandisadditionallyrankedastheseventhmostpopulatedcityinthe country. In the last five years the Citysmetropolitan area grew by 9.1% and is projected to grow anadditional7.6%throughtheyear2020.MajoremployersinandaroundtheSanAntonioareaincludetheDepartmentofDefensethroughJointBaseSanAntonio (Lackland,FortSam&Randolph),H.E.B.FoodStores,UnitedServicesAutomobileAssociation,CityofSan Antonio, Northside, North East and San Antonio Independent School Districts,Methodist Health CareSystem,BaptistHealthSystems,andJPMorganChase.SanAntoniowill celebrate its 300th anniversary onMay 5, 2018, amilestonematched by few cities in theUnitedStates.FromYanaguanasettlementtotheVilladeBejartotheseventhlargestcityintheUnitedStates,SanAntoniosremarkablejourneytellsthestorynotjustofitspeopleandplacesbutoflargerforcesthatshapedtheworldwe live in today. To ensure this historic date is celebrated,Mayor IvyR. Taylor created the SanAntonio Tricentennial Commission. The Tricentennial Commission will be supported by the TricentennialOrganizingCommittee, composedof staff from thepublic sector,nonprofit and philanthropic communities.TheworkoftheOrganizingCommitteewillbuildonextensiveresearchconductedbyCityofSanAntoniostaff.

ECONOMICCONDITIONSANDOUTLOOKAsacommunity,SanAntoniohaspositioneditselfforlongtermgrowthandprosperitybysuccessfullyfollowingastrategytodiversify itseconomyand improvequalityof lifeforallcitizens. Theeconomicstrategyresultingfrom SA2020 emerges as the Citys roadmap to become a leader in job creation bymaintaining growth intraditional industry sectors while specifically targeting job growth in the following sectors: healthcare andbiosciences, information technologyand informationsecurity,aerospace,and thenewenergyeconomy. TheCitys SA2020 goals are being pursued by utilizing San Antonios unique assets, including its historical andcultural heritage, formidable local institutions (e.g.military bases, universities,medical center), and naturalresourcessuchastheEagleFordShaleformationinSouthTexas.In addition to charting our course for continued economic prosperity, SA2020 also focuses on ongoinginfrastructure improvements,neighborhood revitalization,workforcedevelopment initiatives, anddowntowndevelopment.Bothgovernmentandcitizensareactivelycommittedtoincreasingthecaliberofeducationalandeconomicopportunities,expandingartsand leisurechoices,revitalizingolderneighborhoods,andplanningforoverallgrowthintheCity.TheCitysculturalandgeographicproximitytoMexicoprovidesfavorableconditionsfor internationalbusinessrelations. Acostoflivingthat isbelowthenationalaverageandthehighqualityoflife the City offers further enhances San Antonios business appeal. In addition to the favorable economicclimate,excellentweatherconditionsyear roundhelpencourageandenhance theoperationofmanyofSanAntoniosmostimportantindustries.SanAntonioshousingmarketremainedverystrongin2015.AccordingtotheSeptember2015MultipleListingServicereportbytheSanAntonioBoardofREALTORS,theaveragepriceofasinglefamilyresidentialhomeinSeptember2015 rose to$228,069,a6.0% increase from lastyear,and themedian rose to$189,283,a7.0%increasefromSeptember2014.

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ECONOMICCONDITIONSANDOUTLOOK(continued)SanAntoniosaverageunemploymentrateforfiscalyear2015was3.7%comparedtothenationalrateof5.4%.The Citys resilient economywas fueled by several targeted industry projects in fiscal year 2015. The Cityutilized a combination of tax abatements, grant agreements, equity investments, impact fee waivers, andnominations for State project designations that assisted in enticing businesses tomove to or remain in SanAntonio. In2015, theCity, inpartnershipwith theSanAntonioEconomicDevelopmentFoundation (SAEDF),workedwith20 companies to createand/or retain4,784 jobs inSanAntonioandBexarCounty. TheCity isconstantlylookingforeffortstosupporteconomicdevelopmentopportunities.Infiscalyear2015,$1.75millionwasappropriatedineconomicdevelopmentincentivefundstoretain,expand,andattract jobcreatingbusinesses. Ofthisamount,$1millionwasdisbursedtoattractahighwage,biomedforeigndirect investmentproject,andahomegrownFortune500headquarterscampus. TheCityadditionallybudgeted$2millionfordowntownandcentralcityneighborhoodstosupportmarketratehousing,retail,anddevelopment projects to continue Downtown San Antonios redevelopment and evolution from a touristdestinationtovibrantSanAntonioneighborhoods.

MAJORINITIATIVESEDUCATIONPreK4SAaims to improve theeducational trajectoryof22,400 fouryearoldchildrenovereightyearswhilebenefittingthousandsmorebytrainingareaschoolteachers,teachersaides,communityPreKproviders,andeducation leaders. Infiscalyear2015,PreK4SAcompletedthesecondfullyearofschooloperationswithallfour locations ineachquadrantoftheCityopenandeducating fouryearolds.EachEducationCenterhasthecapacitytoserve500studentstotaling2,000annually.Towardthisgoal,PreK4SAreceivedover4,000studentapplicationsforthe20152016schoolyear.PreK4SAstronglyemphasizesfamilyengagementinearlyeducation.Throughamultiprongedapproach,theprogram provides training and events, dedicates family specialists towork and provide services to families,collectsfeedbackwithsurveysandevaluations,andoffersaplethoraofresources. PreK4SAalsopartneredwithavarietyofcommunitygroups, including theHEBRead3andBaptistFamilyChildrenServicesParentingProgram.Family specialists coordinatedavarietyof familyeventsatCentersand throughout the communityfeaturingtopics likereading,strangerdanger,nutritionand learning. FamilieswerealsoencouragedtoattendcommunityeventsthroughoutSanAntonio.As part of the professional development services provided by the program, PreK 4 SA staff works witheducatorsthroughoutSanAntoniotoimproveeducationalpracticesandstandardsforchildreninPreKthrough3rdgrade.Servicesareprovidedinpublic,privateandparochialschoolsaswellaschildcarecentersthroughouttheCity.Professionaldevelopmentcoacheshostedatotalofsevensummeracademiesandprovidedresourcesto 456 educators throughout San Antonio. In addition, the professional development coaches researched,createdandpresented12citywideSaturdayeventsforPreKand1stgradeteachersatthePreK4SAtrainingfacilitiesthroughouttheschoolyear.Thecoachesconductedlabschoolvisits,smallgroupplanning,curriculumdevelopmentsessionsandavarietyoftrainingeventsforeducators, includingtrainingfairsforchildcarestaffcohostedbyVOICESforChildrenandCityCouncil.PreK4SApresented35uniquesessionsforchildcarestaffservingthreeandfouryearoldchildren.

PreK4SAcontractedwithEdvanceResearch,Inc.incollaborationwiththeNationalInstituteforEarlyEducationResearch,affiliatedwithRutgersUniversity, toconductaneightyear independentevaluationof theprogram.The Year 2 (201415) evaluationmeasured student growth on six outcomes using Teaching StrategiesGoldAssessment:cognitive,literacy,mathematics,orallanguage,physicalability,andsocioemotionalbehavior.

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MAJORINITIATIVESEDUCATION(continued)TheYear2reportmeasuredthepreandpostperformanceofPreK4SAstudentsascomparedtoanationallynormedsampleofchildrenofthesameagegrouptakingthesameassessment,sinceastatecomparisonisnotavailable.ThoughPreK4SAchildrenbegantheprogramatasignificantlylowerlevelthanthenormedsampleinallskillareas,overtimestudentssurpassedthenationallynormedgroupinthreeofsixoutcomes:cognitive,mathematics,andliteracyskillsandwereonparfororallanguageskills.InFebruary2015,theCitysDepartmentofHumanServices(DHS)receivedagrantawardtoestablishanEarlyHeadStartChildCarePartnership(EHSCCP)program.EarlyHeadStartisaUnitedStatesDepartmentofHealthandHumanServices(HHS)fundedearlychildhoodeducationanddevelopmentprogramforlowincomefamilieswith infantsand toddlers (ages6weeks to35months). A totalof216 lowincome infantsand toddlersareenrolled in the EHSCCP programwhich supports a twogeneration strategy by allowing parents towork orremain inschoolwhileprovidingaccesstohighqualityearlychildhoodeducationandcare. ProgramfacilitiesarelicensedthroughtheTexasDepartmentofFamilyandProtectiveServicesandmeethighqualityEarlyHeadStartsafetystandards.Enrolledchildrenbenefitfromlowteachertochildratiosandsmallclasssizes,qualifiedteachers receiving ongoing supervision and support with implementation of structured curriculum andresponsivecaregiving,andbroadscaleparentengagementactivities.

MAJORINITIATIVESCAPITALPROGRAMSDuringtheMay2012election,citizensofSanAntoniovotedforandapproveda$596millionGeneralObligationBond Program. The 2012GeneralObligation Bond Program, a five year program, is the Citys largest bondprograminhistory.Thereare41projectssetforstreets,bridges,andsidewalks;17projectssetfordrainageandflood control;68projects set forparksand recreation;11projects set for library,museum,and culturalartsfacilities;andthreeprojectssetforpublicsafetyfacilities.Ofthe$596millionapproved,$538millionhasbeenissued.InMay2015,votersapproved, forthe fourth time,a1/8ofacentaddition tothe localsalestaxto fundtwoenvironmental initiatives. One initiative provides funds to purchase sensitive properties located over theEdwardsAquiferwhichistheCityslargestsourceofdrinkingwater.Over134,000acreshavebeenprotected.Another initiative is to acquire property and develop linear greenway trails in flood zones along cityownedcreeks.Currentlythereare47milesoflineargreenwaytrailsavailableforpublicenjoyment.The$325millionexpansionoftheHenryB.GonzalesConventionCenterwasunveiledonJanuary26,2016.TheexpansionmarksthelargestcapitalimprovementprojectintheCityofSanAntonioshistoryandincreasesthefootprintto1.6millionsquarefeet.Tobetteraccommodatelarger,morevariedevents,514,000squarefeetofcontagious exhibit space has been added, 86,500 square feet of columnfreemultipurpose space, a 54,000square foot ballroom the largest ballroom in Texas, and 70meeting rooms. Others new features includeenhanced access to areas throughout the building, innovative ecofriendly design, advanced technology andpublic art that exudes the history and culture ofSan Antonio. Demolition of the original west building iscurrentlyunderwayandwillmakeroomfortheexpansionofHemisFairPark,allowingformanyotherexcitingchangesyetcomingtothecommunity.CityCouncilapprovedover$43.5millionincapitalprojectimprovementstotheAlamodome.Theprojectscopefor theAlamodome includeswideningof thepublicarea concourses to reduce congestion,expansionof theNorthPlazaforingressandpregameactivities,creationofanewunderground24,000squarefootmediaroom,outdoorterracesattheclublevel,andvarioustechnologicalimprovements.TheseimprovementswillmaintainthefacilityasachoicevenueformajornationalhighprofileeventsandassistinmeetingcurrentrequiredfacilitystandardstohosttheNCAAMensFinalFourin2018.ConstructionattheAlamodomecommencedinJanuary2016withfinalcompletionscheduledforNovember2017.

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MAJORINITIATIVESCAPITALPROGRAMS(continued)AttheSanAntonio InternationalAirport,planninganddesignforexpansionoftheCustomsandBorderPatrolspacefrom15,197to38,000squarefeetbeganin2015withconstructionexpectedtobeginJanuary2016.Thisimprovementwillincreasevolumeofarrivinginternationalpassengersfrom300perhourto800perhour.July2015 saw thegroundbreakingon themasterplanapprovedConsolidatedRentalCarFacility (CONRAC)at theSanAntonio InternationalAirport. CONRACwill improve the rental car experience formillions of the Citysvisitorsbycentralizingthecarrentalfacilities inone locationonairportpropertyandwillreplacetheAirportsshorttermpublicparkinggarage.Constructionofthefacilityisfundedbyacustomerfacilitychargeincludedonall airport car rental transactions. Public parking in the 1.8million square foot, sevenstory facilitywill beavailabletotravelersinlate2017withtherentalcarportionslatedtobecompletedinMarch2018.

MAJORINITIATIVESCONVENTIONANDTOURISMOnJuly5,2015,SanAntoniosfiveSpanishcolonialmissionshavebeendesignatedaWorldHeritageSitebytheUnitedNationsEducational, Scientific andCulturalOrganization.The fivemissions includeMission San Jos,Mission Concepcin,Mission San Juan,Mission Espada, and the Alamo. This exceptional honor has beenbestowed upon only 23 sites in theUnited States. The fivemissions represent the largest concentration ofSpanishcolonialmissions inNorthAmerica. This isthe firstWorldHeritageSite inTexas.By2025,theWorldHeritageSiteeconomicimpactonSanAntonioandBexarCountyisexpectedtogenerateupto$105millioninadditionaleconomicactivityandupto1,098extrajobs.Fiscalyear2015wasasuccessfulyearforboththeHenryB.GonzalezConventionCenterandAlamodome.Withmore than 850,000 attendees throughout 300 events, the Convention Center exceeded its annual budgetedrevenue budget. Similarly, theAlamodome exceeded its annual revenue, and hostedmore than 1.1millionvisitorsat136events throughout theyear. In July, theCityhosted the largestconvention todatewithover65,000attendeesfortheSeventhDayAdventistGeneralConference.UnderthedirectionofCityCouncil,municipalstaff isdevelopingamultistageplantoconverttheSanAntonioConvention&VisitorsBureau (CVB)fromagovernmentalagency intoan independentnonprofitorganizationwithgreaterfundingflexibilityandstakeholderinput.Thetransitiontoan independentnonprofitorganizationwas recommendedbyaMayoralTaskForce inDecember2015. OnFebruary18,2016CityCouncilvoted toapprovearesolutionthatwillallowCVBtopursuetheestablishmentofanonprofitentity.Theproposedtimelineforarestructuringwouldbeginwiththeestablishmentofanewnonprofitbythefallof2016.Ifnextstepsareallapproved,CVBpersonnelwouldtransitionintothatorganizationbyJanuary2017andtheprocesswouldbecompletedbyOctober2017.TheCityandBexarCountyformedajointventurePublicFacilityCorporation(PFC)topurchaseandownToyotaField.ToyotaFieldisaprofessionalsoccerstadiumthatwasbuiltin2013.ItislocatedonthenortheastsideofSanAntonioandiscurrentlythehomeofSanAntonioFootballClub,aUnitedSoccerLeagueteam.Thestadiumhas a capacity of 8,296 for soccermatches and 13,000 for concerts and festivals. The newly formed jointventurewill leasethe facilitytoSpursSportsandEntertainment inhopesofgarneringaMajorLeagueSoccerTeamtobringtoSanAntonio inthenearfuture. TheCity, inconjunctionwithBexarCountyandSpursSportsandEntertainment,providedfundstothejointventuretotaling$21millionfortheFieldspurchaseinDecember2015.

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MAJORINITIATIVESPLANNINGANDCOMMUNITYDEVELOPMENTInthe2013StateoftheUnionaddress,PresidentObamaannouncedthathewoulddesignate20PromiseZonesnationwide:urban,rural,andtribalcommunitieswheretheAdministrationwouldpartnerwithlocalleaderstocreate jobs, increase economic activity, improve educational opportunities, and reduce violent crime. OnJanuary9,2014, theCitywasselectedasoneof the first fivePromiseZones. TheCitycreated theEastPointPromise Zone (EPZ), inpartnershipwith theUnitedWayof SanAntonio andBexarCounty, the SanAntonioHousing Authority, San Antonio for Growth on the Eastside and SA2020 to handle the operations of theAdministrations funding award. EPZs additional support partners include SanAntonio Independent SchoolDistrict, Judson IndependentSchoolDistrict,St.PhilipsCollegeandprivate sectorbusinesses,employersandinvestors.FederaldesignationoftheEPZofferstheopportunitytointegrateandleveragetheseinitiativesandmakenew,materialimprovementstothecommunityseconomichealthandtheresidentsqualityoflife.SixkeyactivitiesareplannedfortheEPZ inthenextfiveyears: jobcreation; increasingeconomicactivity; improvingeducationactivities;reducingseriousorviolentcrime;leveragingprivatecapital;andreducingpovertyandunemployment.AsofFebruary2015, thePromiseZonepartnershavecollectivelybeenawardedapproximately$32million infederalfunding,whichwillbeusedtoachieveEPZsgoals.In March 2015, Mayor Ivy Taylor pledged, along with approximately 225 other mayors and City leadersthroughouttheCountry,toendVeteranHomelessnessbytheendof2015.SanAntonioestablishedagoalofhousing849VeteransbyDecember31,2015.AsofNovember16,2015,634havebeenpermanentlyhousedandanother215are in transitionalhousing.Asameansofencouraginga concentratedeffort tohouse theremaining by the end of the year, the City through Department of Human Services and the South AlamoRegionalAlliancefortheHomeless(SARAH)havegatheredkeymembersofSARAHincludingFamilyEndeavors,theAmericanGIForum,SanAntonioHousingAuthority,andHavenforHope,amongotherstoformaVeteransHomelessnessWorkingGroup.Thegroupcontinuestodiscussandcreatesolutionstothebarrierstohousingforthemostvulnerablehomelessveterans. Inaneffort toassistwith thebarrierof insufficienthousingunitsavailable for themostvulnerablehomelessveterans,DHSandSARAHarepartneringwithprivateandcommunitybasedorganizationstoinitiateacampaign to provide sufficient resources to implement amodel of Housing Firstwith a goal of developingadditionalpermanentsupportivehousingunitsintheSanAntonioarea.SATomorrow,acollaborativeprocess involving localgovernments,businesses,advocacygroups, themilitary,and local citizens, represents an innovative, threepronged planning effort to guide the City toward smart,sustainable growth. SA Tomorrowwas startedwith the vision established through the SA2020 process andallowsCityleadershiptounderstandandincorporatecriticalissuesfromthreeseparatebutinterrelatedplans(aComprehensive Plan, Sustainability Plan, andMultimodal Transportation Plan) into a consolidated plan thatgivespolicydirectionandguidancethroughtheyear2040ensuringeveryaspectofdaytodaylifeisaddressed:streets and connectivity, housing, green and healthy neighborhoods, public facilities and community safety,historicpreservation,militaryaffairs,naturalresources,energy,watersupply, jobs,economiccompetitiveness,educationandmore.

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MAJORINITIATIVESPRIVATEPUBLICPARTNERSHIPSAsthepopulationoftheCitycontinuestogrow,thereisanincreasingneedtorevitalizeitsurbancoreandforthedevelopmentandconstructionofnewpublicfacilities.Inordertoassistlocalgovernmentalentitiestomeettheir growing infrastructure needs, the State of Texas has enacted the Public and Private Facilities andInfrastructureActtoallowgreateruseofpublicprivatepartnerships(P3).The City implemented a P3 program with a goal to encourage redevelopment of underdeveloped andunderutilized properties, share risk and expense between the City and the contracting private entity, andparticipate in cash flow performance by organizing publicprivate partnerships. Through this contractualagreement,theassetsandprofessionalskillsofeachsector(publicandprivate)aresharedtodeliverafacilityand/orservicefortheuseofthegeneralpublicandeachsectorshares inthepotentialrisksofthetimelyandefficientdeliveryoftheserviceorfacility.OnJune4,2015,CityCouncilapprovedarealestatedealbetweentheCity,WestonUrbanandFrostBankthatwillresult inaconsolidatedofficetowerforCityoperations,facilitatethedevelopmentof265housingunitsintheCentralBusinessDistrictandforeverchangedowntownSanAntoniosskylinewiththeconstructionofthefirstnewofficetowerdowntownsince1989. WestonUrban,thelocaldeveloperplanningthenewofficetower,willbuild a $142million, 400,000squarefootoffice toweron Frostsmotorbank andparking lotdiagonallyacrossfromitscurrentheadquarters.Frostwouldoccupy250,000squarefeetofthenewtower,whichwouldserve as its new headquarters, while making 150,000 square feet available for rent by other tenants. Constructiononthisprojectisexpectedtobegininfall2016withacompletionplannedfor2019.TheCitywillpurchasetheFrostBankTowerandtheFrostParkingGaragetoserveasaconsolidatedofficetowerandgarageforCityoperations.By2020,over1,300employeeswillbeconsolidatedintotheupgradedbuildingandwilloccupy12ofthetowers18floors.TheCitywillalsosellfivedowntownproperties(threebuildings,twoparkinglots)toWestonUrbantooffsetthepurchasepricefortheFrostBankTower.WestonUrbanwilldevelopthe soldproperties into residentialunits,adding265apartments to theCity'sDowntownBusinessDistrictby2023.OneofthepropertiestobesoldistheMunicipalPlazaBuilding,whichhousestheCityCouncilChamber.The Citywillmaintain ownership of the City Council Chambers and the B room, and CouncilmeetingswillcontinuetotakeplaceinthecurrentChamber.ThetimingofthissalewillbeaftertheCitymovesintotheFrostTower.TheCityisworkingwithvariousdevelopersonP3projectssuchastheDwyerP3,theRedBerryEstateP3,andtheWaterStreetP3,managedbyHemisfairParkAreaRedevelopmentCorporation (HPARC). TheCityownedproperty locatedat307Dwyerhasbeenvacantsince2010. Theselecteddeveloper,LandbridgePartners,willconstruct a $50millionmixed usedevelopment consistingof 272housingunits, approximately 50 thousandsquarefeetofcommercialspaceand450parkingspaces. Theproject isexpectedtoopen inearly2017. TheRedBerryEstate,locatedat856GemblerRoad,consistsof84acresandincludestheRedBerryMansionandamanmade lake. The City selected a development team proposing a $149.8 million project that includesapproximately 600multifamily housing units, 66 townhomes, and over 300 thousand square feet of officespace,medical office space, retail, dining and entertainment venues. The first phase of the projectwill becompletedinsummer2017andthesecondphasewillbecompletedinspring2019.With theexpansionof theCitysConventionCenter,HPARC ismoving forward todevelopHemisfairPark,anarea famous for hosting the 1968Worlds Fair.HPARCwas established in 2009 by City Council to lead theredevelopmentof theHemisfair area, including expanding and improving theparkland andpublic areas. InFebruary2012,CityCouncilapprovedHPARCsMasterPlan.HPARCsvisionofHemisfairisforittobecomeoneoftheworldsgreatpublicspaces.Toaccomplishthisgoal,HPARCwillberelyingonseveralP3opportunities.

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MAJORINITIATIVESPRIVATEPUBLICPARTNERSHIPS(continued)ThefirstP3relatingtothisnewdevelopmentistheWaterStreetP3.ThepurposeoftheWaterStreetP3istocreate a vertical structurewithin the southwest quadrant ofHemisfair to accommodate public parking andmixedincome residential units and commercial space. All lease payments will be directed towards themaintenance,operationsandprogrammingofYanaguanaGarden,a4.1acrefreeandaccessiblepublicparkbuiltfor all ages and abilities. On March 3, 2015, HPARC presented its selected vendor to the Economic andCommunityDevelopmentCommittee,asubcommitteeofCityCouncil,andreceivedapprovaltomoveforwardwithnegotiations.TheYanaguanaGarden (Garden) is the firstareaof the redevelopedHemisfairParkopenedOctober2,2015,with4.1acresofactiveplayenvironmentdesigned forallagesandability levels. TheGarden servesadualpurposetoprovideeducationandrecreationtothecommunity.Historichomesthatlinethepropertywillsoonbe filled with new tenants including a coffee shop, a paleteria, a brewery and a caf. Between climbingstructures, public art, two games plazas, a splash pad, a sanddigging pit, and loads of activities andprogramming, theGardenhas something foreveryone! TheGarden isonlya smallpartof the total37acredevelopmenttocomefeaturingevenmorepark,newretail,ampleparkingoptionsandnewresidences.

FINANCIALINFORMATION

Themanagementof theCity is responsible forestablishingasystemof internalcontrols thataredesigned toprovidereasonableassurancethatassetsareprotectedfromloss,theft,ormisuse.TheCitysaccountingsystemsupports the internalcontrolsandprocedures,whichprovide reliable financial records forpreparing financialstatements in conformitywithGAAP. The internal control structureprovides reasonable assurance that theCitysassetsaresafeguardedaswellasthereliabilityoffinancialrecordsforpreparingfinancialstatements.Theconceptofreasonableassurancefirstrecognizesthatthecostofacontrolshouldnotexceedthebenefitslikely to be derived. Secondarily, the evaluation of costs and benefits require estimates and judgments bymanagement.Budgetary compliance is a significant tool formanaging and controlling governmental activities, aswell asensuringconformancewiththeCitysbudgetarylimitsandspecifications.Theobjectiveofbudgetarycontrolsisto ensure compliancewith legal provisions embodied in the annual appropriated budget approved by CityCouncil.Levelsofbudgetarycontrol,thatisthelevelsatwhichexpenditurescannotlegallyexceedappropriatedamounts, areestablished at thedepartment levelwithin individual funds. TheCityutilizes anencumbrancesystemofaccountingasonemechanismtoaccomplisheffectivebudgetarycontrol.Encumberedamountslapseatyearendandaregenerallyappropriatedaspartofthefollowingyearsbudget.AnotherbudgetarycontrolisthemonthlyrevenueandexpenditurereportsummarizingbydepartmentbudgetandactualbalanceswithvariancesthataregeneratedandreviewedbytheOfficeofManagementandBudget,FinanceandtheCityManagersOffice.Eachquarter,theOfficeofManagementandBudgetandFinancemeetwithdepartment representatives toassessdepartmentsexpendituresbasedonactual todateandprojectedexpendituresfortheremainderofthefiscalyear.

These projected expenditures are compared against the legally adopted budget for analysis andrecommendationstotheCityManagersOfficeandarepresentedtoCityCouncil.Duringthemidyearbudgetassessments,anadditionalstepisaddedtothereviewprocessrelatedtoformaladjustmentrecommendationstoCouncilforadoptiontomodifytheoriginalbudget.Atfiscalyearend,aspartoftheannualreviewandcloseout process, Council is provided information and recommendations to again approve desired budgetadjustmentsandcarryforwardsforthenextfiscalyear.

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FINANCIALINFORMATION(continued)The City further implemented available budget controlswithin its system of record for capital projects andgrants.Thesystemwarnswhencumulativeexpendituresarewithin75.0%oftotalbudgetandwillnotallowtheprocessingofnonpayrolltransactionsinexcessofthebudget.EachyeartheCitypreparesafiveyearfinancialforecast(Forecast)priortotheadoptionoftheannualoperatingbudget. The Forecast is a financial and budgetary planning tool that provides a current and longrangeassessmentoffinancialconditionsandcostsforCityservices.TheForecastincludestheidentificationofservicedeliverypolicyissuesthatwillbeencounteredinthenextfiveyearsandthatwillhaveafiscalimpactupontheCitysprogramofservices.The Forecast also examines the local and national economic conditions that have an impact on the Cityseconomyand,ultimately, itsbudget. TheForecast servesasa foundation fordevelopmentof theproposedbudgetbyprojectingrevenuesandanticipatedexpendituresunderadefinedsetofassumptions.TheForecastenables theCouncil and staff to identify financial issues in sufficient time todevelop aproactive strategy inordertoaddressemergingstrategicissues.TheannualbudgetservesasthefoundationfortheCitysfinancialplanningandcontrol. Thedevelopmentofthe Citys annual budget begins inMay,when all departments of the City are required to submit potentialreductionsandadditionalappropriationrequeststotheOfficeofManagementandBudget.During this period, the Office of Management and Budget reviews departments base budgets, potentialreductions and additional appropriation requests with each department and Executive Leadership TeammemberstodevelopbudgetrecommendationsfortheCityManagersconsideration.

Afterobtaining theprioritiesof thecommunitybyhosting fiveCommunityBudgetmeetings,holding theCityCouncil Goal Setting Session to establish priorities for the upcoming budget and conducting reviews ofdepartmentbudgetswiththeCityManager,theCityManagerpresentstheproposedbudgettotheCityCouncilforreviewinearlyAugust.The proposed budget represents the City staffs professional recommendation to utilize revenues andexpenditures inorder to achieve abalancedbudget,whileoptimizingCity servicedeliveries, and addressingprioritiesoftheCityCouncilandresidents.Thefiscalyear2015BudgetincorporatedthefinancialpoliciesthatwereapprovedbyCityCouncilduring theGoalSettingSessions. The financialpolices included the following:increase the General Fund budgeted financial reserves from 9.0% to 10.0%;manage crowdout balancebetweenPublicSafetyandNonPublicSafetybudgetswithintheGeneralFund;maintainsPublicSafetybudgetsat 66.0% of General Fund; manage the structural balance in the General Fund; maintain moderatelyconservativerevenueprojections;establishcontingencyreservesof$1millionforGeneralFundand$3millionforcapitalbudget;address InternalServiceFundDeficitswithinthree to fiveyears;andmaintainanavailablefundbalancetargetof15.0%fortheGeneralFund.PartoftherecommendationspresentedtoCityCouncilforfiscalyear2015alsoincludedresultsfrominitiativestoreduceadministrativeoverheadandimplementprocessimprovements.TheOfficeofManagement&BudgetInnovation Team completed an initiative to improve utility assistance by making it faster and easier forresidents,andalsoresultedinover$220thousandinsavings.The City continues its commitment to efficient and prioritized service delivery by leveraging operationalimprovements and investments in technology andwill continue to utilize the Innovation Team to performefficiencyinitiativesacrosstheCitytoassistinfindingnewareasofimprovementstoleverage.

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FINANCIALINFORMATION(continued)DuringCityCouncil review, severalbudgetwork sessionswereheld to review theproposed serviceprogramdetails included in theproposedbudget. TheCityheld fiveadditionalCommunityBudgetmeetingsafter thefiscal year 2015Budgetwas proposed and two CityWide PublicHearings for community input. The City isrequiredtoholdatleastonepublichearingontheproposedbudgetduringtheperiodofitsconsideration.City Councilmust adopt a final budget each year no later than September 27. The appropriated budget ispreparedbyfund(e.g.,GeneralFund)anddepartment(e.g.,FinanceDepartment).The legal levelofbudgetarycontrol isapprovedbyCityCouncilatthe individualfundanddepartmental level.Expenditures by department andmajor category (personnel, nonpersonnel, and capital outlay) are furtherdefinedinthebudgetdocument.TheCityManagerordesigneemay revise theapproveddepartmentexpenditureallotmentsduring the fiscalyear, but in no event shall the aggregate departmental expenditure allotment exceed the appropriationavailable to thedepartmentunlessapprovedbyCityCouncil. TheCityCouncilmayatany time transferanyunencumberedappropriationbalanceoranyportionthereofwithinadepartmentofficeoragencytoanotheruponwrittenrecommendationbytheCityManager.Asameansofmanaging theCitys financialstanding, theCityestablishedandmaintainsabudgeted financialreservewithin theGeneral Fund. The financial reserveprovidesbudgetary flexibility forunexpectedevents,financialemergencies,andtheusualfluctuationinrevenueexpenditurepatterns.Infiscalyear2015,theCity increased itsbudgetreserveto10.0%andachievedatwoyearbudgetedfinancialreserveof3.0%. Since2005,theCityhas increased itsfinancialreservesfrom3.4%oftotalappropriationsto10.0%oftotalresources in fiscalyear2015. The totalBudgetedFinancialreserve for fiscalyear2015 is$103million. The contingency reserve for the General Fund is $1 million and $3 million for capital budget.AdditionallytheCitymaintainedthePublicSafetybudgetsat66%ofGeneralFund.TheCitycontinuestoevaluatethefinancialreservepolicyasameansoffiscalprudence inconsiderationwithCityoperations, implicationstotheCityscreditrating,andCityCouncilpriorities inordertomaintainastrongandsolidfinancialpositioncoupledwithflexibilitytoadapttochangingeconomicconditions.The City further utilizes a comprehensive debtmanagement financial planning program, which is updatedannually and is amajor component of the Citys financial planning. Themodel projects financing needs,measuringandassessingthecostandtimingofeachdebtissuance.Itinvolvescomprehensivefinancialanalysis,whichutilizes computermodeling,and incorporatesvariables suchas interest rate sensitivity,assessedvaluechanges,annexationsandcurrentadvalorem tax collection rates.Useof this financialmanagement toolhasassistedtheCity inmeeting itsfinancingneedsbyfacilitatingtimelyandthoroughplanning,thusallowingtheCitytocapitalizeonmarketopportunities.

GRANTFUNDS

The City also actively seeks and applies for Federal and State grants that are in line with the Citys coreoperationsorinitiatives,asanadditionaltoolinprovidingservicestothecitizensofSanAntonio.In2015,theCitywasawarded$196.6millioninFederalassistanceand$16.6millioninStateassistanceforatotalof$213.2million. The Citywould have been unable to undertake the construction of public improvements and theoperationofprogramswithoutthesupportofthesegrants.

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AWARDSThe City maintains a strong financial position with the three major rating agencies Fitch,Moodys, andStandard&Poors,reaffirming,forthesixthyear inarow,an AAA, Aaa,and AAAgeneralobligationbondrating,respectively.Theseratingsweremaintaineddespitestrictergradingrequirementsimplementedbysomeratingagencies. TheCity istheonlycitywithapopulationofmorethan1milliontoreceiveanAAAorAaaratingfromthethreemajorratingagencies. TheAAAorAaabondratingisthehighestcreditratingthatanentitycanreceive.TheCityearnedthePlatinumLeadershipCircleAwardfromtheComptrollerofPublicAccountsforcalendaryear2014.TheawardrecognizestheCitystransparencyeffortsintheTexasComptrollerLeadershipCircleProgramthatprovideseasyaccesstothepublictoFinancialandBudget Information. This isthefifthconsecutiveyeartheCityhasreceivedthehighestleveloftransparencyawardedbytheComptrollersOffice.TheState iscurrently redesigning theLeadershipAwardandceased reviewingapplications in2015while theredesignisbeingdone.TheCitywillcontinuetomonitortheAwardtodeterminewhatchangesarebeingmadeandtowhatextenttheCityintendstoadoptandapply.TheOfficeofManagementandBudgetreceivedtheAnnualDistinguishedBudgetAwardfromtheGovernmentFinanceOfficersAssociation, recognizingoutstanding achievement inpreparationof the2015Operating andCapitalBudgetforthe32ndconsecutiveyear.The Office ofManagement and Budget additionally received the PerformanceMeasurement Certificate ofExcellenceAwardforthe4thyearinarowfromtheInternationalCity/CountyManagementAssociation(ICMA).SanAntonioisoneof28jurisdictionsreceivingthishighestlevelofrecognitionthisyear.According to the ICMA, Jurisdictionsmeeting thequalificationshavedemonstrated leadership in continuousimprovementandcommunityengagement,andtheyserveasexamplesforothergovernmentstofollow.The Finance Department received the Achievement of Excellence in Procurement (AEP) award for the 18thconsecutiveyearinrecognitionoforganizationalexcellenceinpublicprocurement.ThroughtheRiskDivisionoftheFinanceDepartment,theCitywasrecognizedasahighperformerontheState's2014PerformanceBasedOversight(PBO)Auditwithascoreof98.7outofapossible100.TheCityranked8thoutofthe116Employersrandomlyselectedfortheaudit.ThePBOAudit isastatutorilymandatedreviewofinsurance carriers, self insures and healthcare providers on the timely payment, processing and electronicreportingoftemporaryincomebenefitsandmedicalbills.TheAuditoccurseverytwoyearsandcoversJanuarythroughJuneoftheauditedyear.

CERTIFICATEOFACHIEVEMENTFOREXCELLENCEINFINANCIALREPORTINGTheGovernmentFinanceOfficersAssociationoftheUnitedStatesandCanada(GFOA)awardedaCertificateofAchievementforExcellence inFinancialReportingtotheCityfor itsCAFRforthefiscalyearendedSeptember30,2014.Thiswasthe39thconsecutiveyearthatthegovernmenthasachievedthisprestigiousaward.Inorderto be awarded a Certificate of Achievement, a governmentmust publish an easily readable and efficientlyorganizedCAFR.ThisreportsatisfiesbothGAAPandapplicablelegalrequirements.ACertificateofAchievementisvalidforaperiodofoneyearonly.WebelievethatourcurrentCAFRcontinuestomeet the Certificate of Achievement Programs requirements, andwe are submitting it to the GFOA todetermineitseligibilityforanothercertificate.

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CityofSanAntonioMayorandCityCouncil

IvyR.TaylorMayor

MikeGallagherDistrict10

JoeKrierDistrict9

RonNirenbergDistrict8

RobertoC.Trevio

CrisMedinaDistrict7

RayLopezDistrict6

District1

ShirleyGonzales

AlanE.Warrick,IIDistrict2

District5

ReySaldaaDistrict4

RebeccaViagranDistrict3

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Citizens of San Antonio

Mayor and City Council

City Manager

Sheryl Sculley City Auditor

Kevin Barthold City Clerk

Leticia Vacek Municipal Court Judge

John Bull Boards and

Commissions

Office of the City Attorney

Martha Sepeda (Acting)

Assistant to the City Manager

John Peterek

Deputy City Manager Peter Zanoni

Chief Financial Officer Ben Gorzell

Assistant City Manager Lori Houston

Assistant City Manager Maria Villagomez

Deputy City Manager Erik Walsh

Transportation & Capital Improvements

Mike Frisbie

Planning & Community Development John Dugan

Solid Waste David McCary

Department of Human Services

Melody Woosley

Convention, Sports, &

Entertainment Facilities

Mike Sawaya

Finance Troy Elliott

Library Ramiro Salazar

ITSD Hugh Miller

Human Resources Lori Steward

Animal Care Services Kathy Davis

Aviation Tom Jones (Interim)

Fire Charles N. Hood

Police William McManus

Metro Health

Dr. Vincent Nathan (Interim)

Parks & Recreation Xavier Urrutia

Convention & Visitors Bureau

Casandra Matej

Culture and Creative Development Felix Padron

Office of Historic Preservation Shanon Miller

Office of Sustainability

Douglas Melnick

Office of the City Council

Chris Callanen

EastPoint Mike Etienne

Assistant City Manager Carlos Contreras

Center City Development Office John Jacks (Interim)

Economic Development

Rene Dominguez

Government & Public Affairs

Jeff Coyle

Pre-K 4 SA Kathleen Bruck

Development Services & Code Enforcement

Roderick Sanchez

Office of Management & Budget

Chad Tustison (Interim)

Building & Equipment Services

Jorge Perez

P3 Financial Analysis

Public Utilities (CPS & SAWS)

Tricentennial Office

Edward Benavides

Alamo Plaza & World Heritage

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FINANCIAL SECTION

Independent Auditors Report

AUSTIN HOUSTON SAN ANTONIO811 BARTON SPRINGS ROAD, SUITE 550 1980 POST OAK BOULEVARD, SUITE 1100 100 N.E. LOOP 410, SUITE 1100 TOLL FREE: 800 879 4966AUSTIN, TEXAS 78704 HOUSTON, TEXAS 77056 SAN ANTONIO, TEXAS 78216 WEB: PADGETT CPA.COM512 476 0717 713 335 8630 210 828 6281

Independent Auditors Report

To the Honorable Mayor and Members of the City CouncilCity of San Antonio, Texas

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business typeactivities, the aggregate discretely presented component units, each major fund, and the aggregateremaining fund information of the City of San Antonio, Texas (the City) as of and for the year endedSeptember 30, 2015, and the related notes to the financial statements, which collectively comprise theCitys basic financial statements as listed in the table of contents.

Managements Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements inaccordance with accounting principles generally accepted in the United States of America; this includesthe design, implementation, and maintenance of internal control relevant to the preparation and fairpresentation of financial statements that are free from material misstatement, whether due to fraud orerror.

Auditors Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We did notaudit the financial statements of HemisFair Park Area Redevelopment Corporation; San Antonio EconomicDevelopment Corporation; Westside Development Corporation; San Antonio Fire and Police PensionFund; or the San Antonio Fire and Police Retiree Health Care Fund; blended and fiduciary componentunits, which represent 73%, 84%, and 9%, respectively, of the assets and deferred outflows, netposition/fund balances, and revenues/additions of the aggregate remaining fund information. We alsodid not audit CPS Energy; SA Energy Acquisition Public Facility Corporation; San Antonio Housing TrustFinance Corporation; San Antonio Housing Trust Foundation, Inc.; or the San Antonio Housing Trust PublicFacility Corporation, discretely presented component units, which represent 66%, 59%, and 80%,respectively, of the assets and deferred outflows, net position, and revenues of the discretely presentedcomponent units. Those financial statements were audited by other auditors whose reports have beenfurnished to us, and our opinion, insofar as it relates to the amounts included for those component units,is based solely on the report of the other auditors. We conducted our audit in accordance with auditingstandards generally accepted in the United States of America and the standards applicable to financialaudits contained in Government Auditing Standards, issued by the Comptroller General of the UnitedStates. Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement. The financial statements of

Brooks Development Authority, CPS Energy, SA Energy Acquisition Public Facility Corporation, San AntonioHousing Trust Finance Corporation, San Antonio Housing Trust Public Facility Corporation, and SanAntonio Water System District Special Project, audited separately by other auditors, were not auditedin accordance with Government Auditing Standards.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial statements. The procedures selected depend on the auditors judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to the Cityspreparation and fair presentation of the financial statements in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectivenessof the Citys internal control. Accordingly, we express no such opinion. An audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of significant accountingestimates made by management, as well as evaluating the overall presentation of the financialstatements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinions.

Opinions

In our opinion, based on our audit and the reports of other auditors, the financial statements referred toabove present fairly, in all material respects, the respective financial position of the governmentalactivities, the business type activities, the aggregate discretely presented component units, each majorfund, and the aggregate remaining fund information of the City as of September 30, 2015, and therespective changes in financial position and, where applicable, cash flows thereof for the year then ended,in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matter

As described in Note 1 to the financial statements, effective October 1, 2014, the City implementedGovernmental Accounting Standards Board (GASB) Statement No. 68, Accounting and FinancialReporting for Pensions An Amendment of GASB Statement No. 27, and GASB Statement No. 71, PensionTransition for Contributions Made Subsequent to the Measurement Date An Amendment of GASBStatement No. 68. As described in Note 18 to the financial statements, the City restated beginning netposition for the adoption of GASB Statement No. 68 and GASB Statement No. 71. Our opinions are notmodified with respect to these matters.

As described in Note 18 to the financial statements, the City also restated beginning net position/fundbalance related to changes in component unit reporting. Our opinions are not modified with respect tothis matter.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the ManagementsDiscussion and Analysis, Budgetary Comparison Schedule General Fund, Budgetary ComparisonSchedule Pre K 4 SA, Schedule of Funding Progress, Schedule of Changes in the Net Pension Liability andRelated Ratios, and Schedule of Contributions, as listed in the table of contents, as well as notes torequired supplementary information, be presented to supplement the basic financial statements. Suchinformation, although not a part of the basic financial statements, is required by GASB, who considers itto be an essential part of financial reporting for placing the basic financial statements in an appropriateoperational, economic, or historical context. We have applied certain limited procedures to the requiredsupplementary information in accordance with auditing standards generally accepted in the United Statesof America, which consisted of inquiries of management about the methods of preparing the informationand comparing the information for consistency with managements responses to our inquiries, the basicfinancial statements, and other knowledge we obtained during our audit of the basic financial statements.We do not express an opinion or provide any assurance on the information because the limitedprocedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectivelycomprise the Citys basic financial statements. The Combining Financial Statements and Schedules,Supplementary Budget and Actual Schedules for Legally Adopted Funds, Capital Assets Used in theOperation of Governmental Funds, Schedule of Expenditures of Federal Awards, as required by the Officeof Management and Budget Circular A 133, Audits of States, Local Governments, and Non ProfitOrganizations, and Schedule of Expenditures of State Awards as required by the State of Texas SingleAudit Circular, and other information, such as the Introductory Section and the Statistical Section, as listedin the table of contents, are presented for purposes of additional analysis and are not a required part ofthe basic financial statements.

The Combining Financial Statements and Schedules, Supplementary Budget and Actual Schedules forLegally Adopted Funds, Capital Assets Used in the Operation of Governmental Funds, Schedule ofExpenditures of Federal Awards, and Schedule of Expenditures of State Awards are the responsibility ofmanagement and were derived from, and relate directly to, the underlying accounting and other recordsused to prepare the basic financial statements. Such information has been subjected to the auditingprocedures applied in the audit of the basic financial statements and certain additional procedures,including comparing and reconciling such information directly to the underlying accounting and otherrecords used to prepare the basic financial statements or to the basic financial statements themselves,and other additional procedures in accordance with auditing standards generally accepted in the UnitedStates of America. In our opinion, the Combining Financial Statements and Schedules, SupplementaryBudget and Actual Schedules for Legally Adopted Funds, Capital Assets Used in the Operation ofGovernmental Funds, Schedule of Expenditures of Federal Awards, and Schedule of Expenditures of StateAwards are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The Introductory and Statistical Sections have not been subjected to the auditing procedures applied inthe audit of the basic financial statements and, accordingly, we do not express an opinion or provide anyassurance on them.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated March 2, 2016on our consideration of the Citys internal control over financial reporting and on our tests of itscompliance with certain provisions of laws, regulations, contracts, and grant agreements and othermatters. The purpose of that report is to describe the scope of our testing of internal control over financialreporting and compliance and the results of that testing, and not to provide an opinion on internal controlover financial reporting or on compliance. That report is an integral part of an audit performed inaccordance with Government Auditing Standards in considering Citys internal control over financialreporting and compliance.

San Antonio, TexasMarch 2, 2016

Managements Discussion and

Analysis

(Required Supplementary Information)

(Unaudited)

1

TheCityofSanAntonio(City)presentsthefollowingdiscussionandanalysisoftheCitysfinancialperformanceduringthe fiscalyearendedSeptember30,2015.Thisdiscussionandanalysis is intended toassist readers in focusingonsignificantfinancial issuesandchanges intheCitysfinancialposition,and identifyinganysignificantvariancesfromthe adopted budget. We encourage readers to consider the information presented here in conjunction withadditionalinformationthatwehavefurnishedinourletteroftransmittalandthefinancialstatementsprovidedinthisreport.Allamounts,unlessotherwiseindicated,areexpressedinthousandsofdollars.FinancialHighlights

TheassetsanddeferredoutflowsoftheCityexceededitsliabilitiesanddeferredinflowsby$2,592,557(netposition). A negative ending balance of ($528,629) in unrestricted net position is the result of theimplementationofGASBStatementNo.68,AccountingandFinancialReportingforPensions(anamendmentofGASBStatementNo.27). Innormalcircumstances,theunrestrictednetpositionwouldbeusedtomeetthegovernmentsongoingobligationstocitizensandcreditors.

Attheendofthecurrentfiscalyear,theCitysgovernmentalfundsreportedcombinedendingfundbalancesof$1,103,086,adecreaseof$96,133comparedtothefiscalyear2014fundbalance.Ofthisamount,$18,300isnonspendableand$1,084,786isspendable.Ofthetotalspendablefundbalance,$743,467isrestrictedinuse,$153,726hasbeencommitted,$19,755 isassignedand$167,838 isunassigned,which isavailable forspendingatthegovernmentsdiscretion.

Attheendofthecurrentfiscalyear,unassignedfundbalancefortheGeneralFundwas$182,698,which is18.2%ofthetotalGeneralFundexpenditures.

OverviewoftheFinancialStatementsThisdiscussionandanalysis is intended toserveas the introduction to theCitysbasic financialstatements,whichhavethreecomponents:1)governmentwidefinancialstatements,2)fundfinancialstatements,and3)notestothefinancialstatements.GovernmentwideFinancialStatementsThe governmentwide financial statements are designed to provide readerswith a broad overview of the Citysfinances,inamannersimilartoprivatesectorbusinessfinancialpresentation.The statement of net position reports the difference between assets, deferred outflows, liabilities and deferredinflowsasnetposition.Overtime, increasesordecreases innetpositionmayhelpdeterminewhetherthefinancialpositionoftheCityisimprovingordeteriorating.The statement of activitiespresents information showinghow the governmentsnetposition changedduring thefiscal year. Changes in net position are recorded when the underlying event giving rise to the change occursregardlessof the timingof thecash flows.Therefore, revenuesandexpenses reported in this statement forsomeitemswillnotresultincashflowsuntilfuturefiscalperiods(e.g.,uncollectedtaxesandearnedbutunusedvacationleave). Both of the governmentwide financial statements distinguish functions of the City that are principallysupportedbytaxesandintergovernmentalrevenues(governmentalactivities)fromotherfunctionsthatareintendedto recover all or a significant portion of their costs through user fees or charges (businesstype activities).Governmentalactivities includegeneralgovernment,publicsafety,publicworks,sanitation,healthservices,cultureand recreation, convention and tourism, urban redevelopment and housing, welfare, education, and economic

ManagementsDiscussionandAnalysis

2

development and opportunity. The businesstype activities of the City include the Airport System, DevelopmentServices,MarketSquare,ParkingSystem,andSolidWasteManagement.In addition, the basic financial statements provide information regarding the Citys legally separate discretelypresentedcomponentunits.Discretelypresentedcomponentunitfinancial information isreportedseparatelyfromtheprimarygovernmentinthegovernmentwidefinancialstatements.FundFinancialStatementsTheaccountsoftheCityareorganizedonthebasisoffunds,eachofwhichisconsideredaseparateaccountingentity.Governmentresourcesareallocatedtoandaccountedforinindividualfundsbaseduponthepurposesforwhichtheyaretobespentandthemeansbywhichspendingactivitiesarecontrolled.Fundfinancialstatementsareusedtopresentfinancialinformationdetailingresourcesthathavebeenidentifiedforspecificactivities.The focusofthefund financialstatements isontheCitysmajorfunds,althoughnonmajorfundsarealsopresentedinaggregateandfurtherdetailedinthesupplementarystatements.TheCityusesfundaccountingto ensure and demonstrate compliance with requirements placed on resources. Funds are divided into threecategories:governmental,proprietary,andfiduciary.FundfinancialstatementsallowtheCitytopresentinformationregardingfiduciaryfunds,sincetheyarenotreportedinthegovernmentwidefinancialstatements.GovernmentalFundsGovernmentalfundsareusedforessentiallythesamefunctionsreportedinthegovernmentalactivities in the governmentwide financial statements. However, unlike the governmentwide statement,governmentalfundfinancialstatementsfocusonthenearterminflowsandoutflowsofspendableresources,aswellasonbalancesof spendable resources available at the endof the fiscal year. Such informationmaybeuseful inevaluatingagovernmentsneartermfinancingrequirements.Asthefocusofgovernmentalfundsisnarrowerthanthatofthegovernmentwidefinancialstatements,itisusefultocomparetheinformationpresentedinthegovernmentalfundswithsimilarinformationpresentedforgovernmentalactivities in thegovernmentwide financial statements.Bydoing so, readersmaybetterunderstand the longtermimpact of the governments nearterm financing decisions. Both the governmental fund balance sheet and thegovernmental fund statementof revenues,expenditures,andchanges in fundbalancesprovidea reconciliation tofacilitatethiscomparisonbetweengovernmentalfundsandgovernmentalactivities.TheCitymaintainsfive individualgovernmentalfundtypesforfinancialreportingpurposes.ThegovernmentalfundtypesareGeneralFund,SpecialRevenueFunds,CapitalProjectsFunds,DebtServiceFunds,andPermanentFunds.Informationispresentedseparatelyinthegovernmentalfundbalancesheetandinthegovernmentalfundstatementof revenues, expenditures, and changes in fund balances for the General Fund, Debt Service, San Antonio EarlyChildhoodEducationMunicipalDevelopmentCorporation(PreK4SA),ConventionCenterHotelFinanceCorporation(CCHFC),and2012GeneralObligationBonds,allofwhichare considered tobemajor funds.Data from theotherfundsarecombinedintoasingle,aggregatedpresentationlabeledNonmajorGovernmentalFunds.Individualfunddataforeachnonmajorgovernmentalfundisprovidedintheformofcombiningstatementselsewhereinthisreport.Proprietary Funds The Citymaintains two types of proprietary funds. Enterprise Funds are used to report thefunctionspresentedinbusinesstypeactivitiesinthegovernmentwidefinancialstatements.TheCityusesenterprisefunds to account for its Airport System,Development Services,Market Square, Parking System, and SolidWasteManagement. InternalServiceFundsareused toaccumulateandallocatecosts internallyamong theCitysvariousfunctions,including,selfinsuranceprograms,informationservices,otherinternalservices,andcapitalimprovementsmanagementservices.Theservicesprovidedbythesefundspredominantlysupportthegovernmentalratherthanthebusinesstype functions. They have been included within the governmental activities in the governmentwidefinancialstatementsandarereportedalongsidetheenterprisefundsinthefundfinancialstatements.Informationispresentedseparately intheproprietaryfundsstatementofnetpositionand intheproprietaryfundsstatementofrevenues,expenses,andchangesinfundnetpositionfortheAirportSystemandSolidWasteManagement,whichareconsideredtobemajorfunds.TheInternalServiceFundsarecombinedintoasingleaggregatedpresentationintheproprietaryfundfinancialstatements.Datafromtheotherenterprisefundsarecombined intoasingle,aggregated

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presentationlabeledNonmajorEnterpriseFunds.Individualfunddataforeachnonmajorenterprisefundandeachinternalservicefundisprovidedintheformofrespectivecombiningstatementselsewhereinthisreport.FiduciaryFundsFiduciaryfundsareusedtoaccountforresourcesheldforthebenefitofpartiesoutsidetheprimarygovernment.Fiduciaryfundsarenotreflectedinthegovernmentwidefinancialstatementsastheresourcesofthosefunds are not available to support the Citys programs and operations.With the exception of agency funds, theaccountingforfiduciaryfundsismuchlikethatusedfortheproprietaryfunds.NotestothefinancialstatementsThenotesprovideadditionalinformationthatisessentialtoafullunderstandingofthedataprovidedinthegovernmentwideandfundfinancialstatements.Other information In addition to the basic financial statements and the accompanying notes, this report alsopresents the required supplementary information of (a) the Citys General Fund and PreK 4 SAs budgetarycomparison schedules that demonstrate compliance with their budget, and (b) pension and postemploymentschedules.TheDebtServiceFund,variousSpecialRevenueFunds,andspecificPermanentFundbudgets,whicharelegallyadoptedonanannualbasis,arealsoincludedintheCAFRassupplementaryscheduleswithintheCombiningFinancialStatementsandSchedules.Additionally,thereportpresentstheFinancialandComplianceReportonFederalandStateGrants,orSingleAuditreport,inthisdocument.GovernmentWideFinancialStatementAnalysisThefollowingtables,graphs,andanalysisdiscussthefinancialpositionandchangestothefinancialpositionfortheCityasawholeasofandfortheyearendedSeptember30,2015.

20152014

(Restated)*2015

2014(Restated)*

20152014

(Restated)*CurrentandOtherAssets 1,750,794$ 1,768,184$ 381,583$ 211,262$ 2,132,377$ 1,979,446$CapitalAssets 4,408,642 4,135,738 674,943 655,691 5,083,585 4,791,429TotalAssets 6,159,436 5,903,922 1,056,526 866,953 7,215,962 6,770,875

TotalDeferredOutflowsofResources 128,773 116,162 11,145 9,633 139,918 125,795

CurrentandOtherLiabilities 608,196 530,772 64,305 48,592 672,501 579,364LongtermLiabilities 3,437,878 3,350,745 614,206 472,244 4,052,084 3,822,989TotalLiabilities 4,046,074 3,881,517 678,511 520,836 4,724,585 4,402,353

TotalDeferredInflowsofResources 37,326 1,412 38,738

NetPosition:NetInvestmentinCapitalAssets 2,615,833 2,554,305 316,995 300,791 2,932,828 2,855,096Restricted 61,796 100,264 126,562 102,390 188,358 202,654Unrestricted(Deficit) (472,820) (516,002) (55,809) (47,431) (528,629) (563,433)TotalNetPosition 2,204,809$ 2,138,567$ 387,748$ 355,750$ 2,592,557$ 2,494,317$

Activities Activities PrimaryGovernment

NetPositionYearEndedSeptember30,2015

(WithComparativeTotalsforSeptember30,2014)

Governmental BusinessType Total

*AmountshavebeenrestatedseeNote18PriorPeriodRestatementsformoreinformation.

FortheyearendedSeptember30,2015,totalassetsanddeferredoutflowsexceededliabilitiesanddeferredinflowsby$2,592,557.ThelargestportionoftheCitysnetposition,$2,932,828representsitsnetinvestmentincapitalassetsusedtoacquirethoseassetsthatarestilloutstanding,andincludesassetssuchasland,infrastructure,improvements,buildings,machineryandequipment,andintangibles.

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CapitalassetsareusedtoprovideservicestothecitizensofSanAntonioandarenotavailableforfurtherspending.AlthoughtheCitysinvestmentincapitalassetsisreportednetofrelateddebtandanyrelateddeferredoutflowsofresources,theresourcesneededtorepaythedebtmustbeprovidedfromothersources,ascapitalassetscannotbeusedtoliquidateliabilities.The restrictedportionof the totalnetposition totaling$188,358 represents resources thataresubject toexternalrestrictions on how theymay be used. The implementation of GASB 68, the longterm liability associatedwithpensions,changedtheunrestrictednetpositionfrom$97,814toadeficitof($528,629).ThefollowingscheduleprovidesadetailofthechangestotheCitysnetposition:

20152014

(Restated)*2015

2014(Restated)*

20152014

(Restated)*Revenues:ProgramRevenues:ChargesforServices 217,773$ 204,850$ 223,331$ 219,462$ 441,104$ 424,312$OperatingGrantsandContributions 175,921 168,170 175,921 168,170CapitalGrantsandContributions 32,642 84,744 45,886 44,206 78,528 128,950

GeneralRevenues:PropertyTaxes 446,705 423,781 446,705 423,781OtherTaxes 465,637 447,571 465,637 447,571RevenuesfromUtilities 348,997 355,515 348,997 355,515InvestmentEarnings 3,164 3,997 562 764 3,726 4,761Miscellaneous 62,021 50,868 13,440 4,861 75,461 55,729

TotalRevenues 1,752,860 1,739,496 283,219 269,293 2,036,079 2,008,789

Expenses:PrimaryGovernment:GovernmentalActivities:GeneralGovernment 96,842 112,845 96,842 112,845PublicSafety 729,938 721,930 729,938 721,930PublicWorks 247,087 324,257 247,087 324,257Sanitation 7,535 7,142 7,535 7,142HealthServices 55,020 55,014 55,020 55,014CultureandRecreation 179,480 167,463 179,480 167,463ConventionandTourism 34,811 31,579 34,811 31,579UrbanRedevelopmentandHousing 30,785 25,949 30,785 25,949Welfare 121,932 115,094 121,932 115,094Education 64,917 8,530 64,917 8,530EconomicDevelopmentandOpportunity 34,634 25,909 34,634 25,909BondIssuanceCosts 2,544 1,862 2,544 1,862InterestonLongTermDebt 88,813 93,313 88,813 93,313

BusinessTypeActivities:AirportSystem 112,439 106,033 112,439 106,033DevelopmentServices 26,042 22,273 26,042 22,273MarketSquare 2,846 2,558 2,846 2,558ParkingSystem 10,038 12,165 10,038 12,165SolidWasteManagement 92,492 98,555 92,492 98,555

TotalExpenses 1,694,338 1,690,887 243,857 241,584 1,938,195 1,932,471ChangeinNetPositionBeforeTransfers 58,522 48,609 39,362 27,709 97,884 76,318

Transfers 7,720 1,570 (7,364) (4,552) 356 (2,982)NetChangeinNetPosition 66,242 50,179 31,998 23,157 98,240 73,336

Beginning,NetPosition(PreviouslyReported) 2,620,505 400,516 3,021,021AdoptionofGASB68andOtherRestatements* (532,117) (67,923) (600,040)

Beginning,NetPosition(Restated) 2,138,567 2,088,388 355,750 332,593 2,494,317 2,420,981

Ending,NetPosition 2,204,809$ 2,138,567$ 387,748$ 355,750$ 2,592,557$ 2,494,317$

*AmountshavebeenrestatedseeNote18PriorPeriodRestatementsformoreinformation.

Activities Activities Government

ChangesinNetPositionYearEndedSeptember30,2015

(WithComparativeTotalsforSeptember30,2014)

Governmental BusinessType TotalPrimary

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TheCitystotalrevenueswere$2,036,079forfiscalyearendedSeptember30,2015.RevenuesfromGovernmentalActivitiestotaled$1,752,860(86.1%)andrevenuesfromBusinessTypeactivitiestotaled$283,219(13.9%).ExpensesfortheCitytotaled$1,938,195.Oftotalexpenses,GovernmentalActivityexpensestotaled$1,694,338 (87.4%)andBusinessTypeexpensestotaled$243,857(12.6%).GovernmentalActivitiesProgramrevenuesfortheCitysGovernmentalActivitiestotaled$426,336,whichis$31,428lowerthanthepreviousfiscal years balance of $457,764. General revenues for the Citys Governmental Activities totaled $1,326,524compared to$1,281,732 in theprior year.General revenues represented65.8%of theCitys total revenue,whileprogramrevenuesprovided34.2%ofrevenuereceivedinfiscalyear2015.ExpensesforGovernmentalActivitieswere$1,694,338comparedtoprioryearsexpensesof$1,690,887.GovernmentalActivitiesincreasedtheCitysnetpositionby$66,242.Thereasonforthechangeisasfollows:

Charges for Services revenues increased by $12,923. The increase in EMS transports and transport feesresulted in higher EMS revenues in the amount of $2,222. Additionally, revenues for the AmbulanceSupplementalPaymentprogramincreasedby$10,000,primarilyasaresultoftheStateprocessingpaymentsforclaimyears2013and2014earlier than theprioryear, resulting in the recordingof twoyearsofclaimsupplementsinfiscalyear2015.

OperatingGrantsandContributionsincreasedbyatotalof$7,751infiscalyear2015.ThePreK4SAprogramwasawarded$933 ingrantdollarsby theTexasDepartmentofAgriculture from theChildandAdultCareFoodProgram,forthefirsttimeinfiscalyear2015.Anadditional$800wasrecognizedforthenewlycreatedEarlyHeadStartprogram,anddueto timing issues,$5,501ofprioryear revenueswas recognized in fiscalyear2015fortheChildCareDevelopmentBlockGrant.

CapitalGrant andContribution revenuesdecreased by $52,102.Revenues formultiple yearsof federally,grantfundedcapitalprojectspassedthroughTxDOTwererecognizedinfiscalyear2014.

PropertyTaxRevenuesincreasedby$22,924duetothe6.8%increaseinthenettaxablepropertyvalue. Other Taxes Revenues increased by $18,066 primarily in the General Sales and Use Tax, reflecting a

continuedconsumerconfidenceintheSanAntonioarea.AnuptickintourismandconventionbusinessalsoincreasedHotelOccupancyTaxesby$2,099fromtheprioryear.

RevenuesfromUtilitiesdecreasedby$6,518duetotheCPSlease/leasebackterminatinginfiscalyear2014.Fiscalyear2014wasthelastyearinwhichtheCityrecognizedrevenuesfromtheleasebackagreement.

MiscellaneousRevenues increasedby$11,153dueprimarilytoacontributionof$4,196fromBexarCountyforimprovementsrelatedtotheBarbaraDriveAreaDrainageanda$2,071increaseintheEmployeeBenefitsFundduetothenewlynegotiatedagreementthatprovidestheCitywith30.0%ofretailprescriptionrebatesfromparticipatingpharmacies.Additionally, in fiscal year2015, thePreK4 SAprogramopened twoneweducationcenters.Therefore,theCitysawanincreaseof$5,580infundingforthePreK4SAprogramduetohigherexpenses related to the increase inenrollment,staff,andother relatedexpenses suchas foodandmaintenanceservices.

GeneralGovernmentdecreasedby$8,149primarilyduetoexpensesassociatedwiththereplacementoftheLEDstreetlightsinfiscalyear2014.

Thedecreaseof$77,170 inPublicWorksexpenses isdueprimarilyto federally fundedgranttransfersthatwererecognizedinfiscalyear2014.

Educationreflectedan increase inexpensesof$56,387. Infiscalyear2014,$27,320wascapitalizedforthecompletionof the fourPreK4SAeducationcenters. Inaddition, fiscalyear2015 reflectedan increaseof$22,422inoperationalexpensesduetotheopeningoftwonewfacilities,increasedenrollmentfrom700to1,500,increasedstafffrom158to409,andincreasedfoodandmaintenanceservices.

TheimplementationofGASB68requiredtherestatementofprioryearexpenditures.Governmentalactivitiesreflectedarestatementof$532,117.

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With theadoptionofGASB68 in fiscalyear2015,governmentalactivities reflectedanoveralldecrease inexpensesof$8,453.Ofthisdecrease,$17,179wasreflectedinPublicSafety.Thisdecreasewasmitigatedbyincreases inGeneralGovernment$2,880,PublicWorks$465,HealthServices$948,CultureandRecreation$2,190,ConventionandTourism$618,Welfare,$459,andEducation$680.

BusinessTypeActivitiesProgramrevenuesfortheCitysBusinessTypeActivitiestotaled$269,217,which is$5,549higherthanthepreviousfiscalyear.Theremainingrevenueswerearesultofinvestmentearningsandothermiscellaneousitems.ExpensesforBusinessTypeActivitieswere$243,857comparedtoprioryearsexpensesof$241,584.BusinessTypeActivitiesincreasedtheCitysnetpositionby$31,998primarilybecauseofthefollowing:

ChargesforServicesforbusinesstypeactivitiesincreasedby$3,869.ThemajorityofthisincreaseisreflectedintheSolidWasteManagementFundattributedtotheonedollar increase inthesolidwastefeeapprovedforfiscalyear2015.

Miscellaneous Revenues increased by $8,579. The Airport System reflected a $12,426 increase ofwhich$11,737 is attributed to revenues recognized for reimbursementof expenses related to theConsolidatedRentalCarSpecialFacilitiesProject(CONRAC).ThisincreasewasmitigatedbytheParkingSystemsdecreaseof$1,095duetoadebtrestructureinfiscalyear2014fortheTaxableGeneralObligations,Series2004andSeries2008.

Expensesincreasedby$1,049duetotheadoptionofGASB68infiscalyear2015.IncreaseswererecognizedintheDevelopmentServicesFund$955,theMarketSquareFund$18,theParkingFund$35,andtheSolidWasteManagementFund$163.ThisincreasewasmitigatedbytheAirportSystemsdecreaseof$122.

TheimplementationofGASB68requiredtherestatementofprioryearexpenditures.Businesstypeactivitiesreflectedarestatementof$67,923.

FinancialAnalysisofGovernmentalFundsActivitiesofthePrimaryGovernmentsGeneralFund,SpecialRevenueFunds,DebtServiceFund,andCapitalProjectsFundsareconsideredgeneralgovernmentfunctions.TheGeneralFund istheCitysprimaryoperatingfund.SpecialRevenueFundsareusedtoaccountfortheproceedsofspecificrevenuesourcesthatarerestrictedorcommittedtoexpenditures for specific purposes other than debt service or capital projects. The Debt Service Fund is used toaccount for financial activity related to the Citys general bonded indebtedness, as well as other longtermobligations.TheCapitalProjectsFundsareusedtoaccountforfinancialactivityrelatedtotheCity indebtednessforCapitalProjects,otheragencycontributions,andtheoperatingactivitiesofthoseprojects.Revenuesfromtaxesincreasedby$40,990,whichisprimarilyattributableto:(1)a$14,400increaseingeneralsalesandusetaxrevenuesmainlyintheGeneralFund($11,086),(2)a$22,924increaseinpropertytaxrevenuesprimarilyintheGeneralFund($12,248)andtheDebtServiceFunds($7,302),and(3)a$2,099 increase inoccupancytaxes intheCommunityandVisitorsFacilitiesandHotel/Motel2%RevenueFunds.Theincreaseingeneralsalesandusetaxesandoccupancy taxes are a resultof a continued consumer confidence in the SanAntonio area and an increasedactivityassociatedwithtourismandconvention.

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The total fundbalanceof theGeneralFundatyearendwas$243,468,an increaseof$24,873 from the total fundbalanceof$218,595 infiscalyear2014.ThetotalspendableGeneralFundbalanceforfiscalyear2015 is$236,442,which represents $537 in restricted, $52,686 in committed, $521 in assigned and $182,698 in unassigned fundbalances. Theunassigned fundbalance represents financial reserve amountsheldby theCity aswell as amountsavailableforadditionalappropriationsattheendofthefiscalyear.ThetotalfundbalanceoftheDebtServiceFundatyearendwas$45,438,adecreaseof$1,370fromthetotalfundbalanceof$46,808infiscalyear2014.Theentirefundbalanceisrestrictedforpaymentofdebtservice.PreK4SA,ablendedcomponentunit,hadanending fundbalanceof$19,586,an increaseof$2,029 fromendingfundbalanceof$17,557infiscalyear2014.PreK4SAsfundbalanceisrestrictedforeducation.CCHFChadanendingfundbalanceof$6,093forfiscalyear2015,whichwasan increaseof$8fromthefiscalyear2014endingbalanceof$6,085.The fundbalance is restricted fordebt serviceexpenditures related to theGrandHyattSanAntonio.Thetotalfundbalanceofthe2012GeneralObligationBondsatyearendwas$298,309,anincreaseof$31,834fromthe total fundbalanceof$266,475 in fiscalyear2014. The increase is from the saleofGeneralObligationBondsissuedtosupportcapitalexpendituresassociatedwiththe$596,000bondprogramapprovedbyvotersinfiscalyear2012.

$276.7

$326.3

$379.5

$407.2 $406.6

$396.8 $395.9 $402.2$423.8

$446.7

$210.1$224.5 $232.3 $221.7 $223.5

$236.8

$259.9 $287.9

$324.6 $339.0

$58.7 $63.9 $68.4 $58.8 $59.7 $63.0 $67.9 $72.8 $77.1 $79.2

$

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

$350.0

$400.0

$450.0

$500.0

FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 FY2015

RevenuesFromTaxes($inmillions)

PropertyTaxes GeneralSales&UseTaxes OccupancyTaxes

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GeneralFundBudgetaryHighlights

Original Final ActualBudget Budget Results

GeneralGovernment 76,648$ 76,481$ 74,075$PublicSafety 689,294 697,453 693,371PublicWorks 55,997 60,489 57,312HealthServices 23,415 23,952 23,425Welfare 32,995 35,072 34,166CultureandRecreation 87,848 89,466 88,567ConventionandTourism 658 659 739EconomicDevelopmentandOpportunity 11,107 27,751 27,044UrbanRedevelopmentandHousing 14,962 15,795 15,382DebtService:PrincipalRetirement 12,330 12,330 12,330Interest 462 462 462

TransferstoOtherFunds 45,365 49,766 48,921Total 1,051,081$ 1,089,676$ 1,075,794$

VariancesinBudgetAppropriations(BudgetaryBasis)GeneralFund

Changes in original budget appropriations to the final amended budget appropriations resulted in a net $34,380increaseinappropriations.Thisincreasecanbesummarizedbythefollowing:

PublicSafetyincreasedby$8,159,duetoanincreaseof$1,094inprioryearcarryforwardcommitmentsand$7,065inmidyearbudgetadjustmentincreasesneededtocoveruniformovertimeandactivehealthcare.

Anincreaseof$4,492inPublicWorksconsistedofprioryearcarryforwardsforNAMPprojects. Economic Development and Opportunity increased $12,429 in which $3,084 was from prior year

carryforwards and $9,345 was from the closing ordinance adjustments. The carryforwards will providefundingforincentiveagreementsformultiplecorporations.

Transfers to Other Funds increased $4,401 which comprised of prior year carryforwards and closingordinanceadjustmentstothe2015StreetMaintenanceprojects.

FinalbudgetedappropriationsfortheGeneralFundwere$1,089,676,whileactualexpendituresonabudgetarybasiswere$1,075,794,creatingafavorablevarianceof$13,882.Significantvariancesareasfollows:

PublicSafetyhadafavorablevarianceof$4,082whichisprimarilyduetouniformvacancies. PublicWorksfinalvariancetobudgetendedfavorablyat$3,177which includes$443 inmotorfuelsavings

duetolowerfuelpricesandelectricitysavingsof$2,246,duetomilderweatherduringthefiscalyear. Convention and Tourism had an unfavorable variance of $80 due to expendingmore formaterials and

supplies.Thereissufficientfundbalancetocoverthisexcessfunding.FinancialAnalysisofProprietaryFundsActivitiesofthePrimaryGovernmentsAirportSystem,DevelopmentServices,MarketSquare,ParkingSystem,andSolidWasteManagementFundsareconsideredproprietaryfunds.TheAirportSystemhandlesoperationsatboththeSanAntonioInternationalAirportandStinsonMunicipalAirport.DevelopmentServicessupportstheactivitiesrelatedto the regulationofCitydevelopment.MarketSquareaccounts forall revenuesandexpensesassociatedwith themanagementandoperationoftheFarmersMarket,ElMercado,theMarketSquareparking lot,andAlameda.TheParkingSystemhandlesoperationsof theCitysparkinggaragesand lots.SolidWasteManagementhandles trashcollectionoperations,recycling,organics,andtheactivitiesoftheCityslandfills.Financialanalysisfortheproprietaryfundsisonthesamebasisasthebusinesstypeactivities.

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CapitalAssetsTheCitys investment in capitalassets for itsgovernmentalandbusinesstypeactivitiesasof September30,2015amountsto$5,083,585(netofaccumulateddepreciation).Thisinvestmentincapitalassetsincludesland,othernondepreciable assets, buildings, improvements, infrastructure, machinery and equipment, intangible assets andconstruction inprogress.Thenet increase in theCitys investment incapitalassets for thecurrent fiscalyearwas$292,156, which is comprised of an increase of $272,904 in governmental activities and a $19,252 increase inbusinesstypeactivities.` ```

20152014

(Restated)*2015 2014 2015

2014(Restated)*

Land 1,429,536$ 1,404,226$ 14,599$ 14,599$ 1,444,135$ 1,418,825$ConstructioninProgress 618,794 422,488 85,124 62,673 703,918 485,161NonDepreciableIntangibleAssets 139,508 123,169 139,508 123,169OtherNonDepreciableAsse